Walmart. Best Buy. Target. And now Apple. One of these might seem like the odd one out, but none of them are. That is because they all now implement one of the fastest growing omnichannel strategies – the ‘ship from store’ model.
Online and ecommerce purchases are seeing a massive surge due to the Covid 19 pandemic. And with stores drowning with stock, this becomes an obvious and great way for retailers to fulfill their orders.
In this practice, omnichannel retailers ship products to their customers from their retail stores as well, not just warehouses or dedicated fulfillment centers. They make use of in-store inventory to cater to their demand, which by the virtue of them being omnichannel, could come from any of their channels.
This type of order fulfillment transforms the store into a multi-purpose operation – as a retail location and also as a virtual fulfillment hub.
The advantages of a ship from store strategy
Now that you know what it is, let us see the major advantages of implementing it.
Reduced shipping costs and lower delivery times
Two key considerations for consumers purchasing online are the speed of delivery and the cost of shipping. They want the order delivered in the fastest time at the lowest shipping cost to them.
A ship from store strategy does just that. The order is shipped from the store nearest to the customer, which is often far closer than a distribution center.
Directly shipping from a store where inventory is readily available helps meet the growing expectations. Also, the demand around next-day delivery can also be easily met.
The capability to expand your reach while decreasing shipping cost is improved with a ship from store model.
Your inventory is optimized and always in stock
It is quite common for your products to fly off the shelves at one location while they lay stagnant at another. There is no point letting this extra stock eat up valuable shelf space. Instead, you can ship it off to consumers who order online, directly from your store.
By using a combination of your warehouses and stores, you can fulfill your orders with far better efficiency. Being able to track your inventory across multiple locations is going to be key to run a successful ship from store operation.
The faster turnover releases shelf space in your store for fresher or newer products. This makes for improved customer experience to your in-store buyers. You would be earning brownie points from both online and offline customers.
Markdowns of store products can be greatly reduced
Using a ship from store strategy allows you to align the demand and needs of one location with the available inventory in another location will reduce the need for markdowns.
Because you are reducing your stock burden, you are also saving money by not letting go of the product at a much lower price. You can keep the value of the product up and move it out of your store at the same time.
Just in-store demand alone will no longer dictate your markdowns. Every markdown that you avoid adds profit to your bottom line. We are sure you aren’t complaining about that!
Executing a successful ship from store strategy
The need of a ship from store strategy is obvious, so are its advantages. So how can you go about actually implementing it?
Optimize your store operations and space
You have to remember – if you are shipping a product from your store, then it has to be picked and packed there. It also has to be done by your in-store workforce, who might not have the experience doing it.
You will have to carve out dedicated space within your store to allow for your store associates to manage the orders. You will also need to have all the right tools and equipment such as packaging material, labels, workspace etc.
It is essential to train your store staff on how to go about fulfilling such orders. They need to be aware of which packaging size to use, how to pack the order safely and efficiently, and when to fulfill the order.
This will also mean selecting the appropriate stores from which you can execute. You might not need all our stores for this, just a few crucial ones with better reach.
Plan in advance, and wisely, which stores work best for a ship from store strategy.
Visibility of inventory and smart routing will play a big role
One thing that will define success for a ship from store model is ensuring the inventory is visible. Monitoring the inventory levels so that neither your in-store nor your online customer has to face an experience of stock not being available.
As a retailer, you cannot even think of running such an operation without a robust inventory and order management tool. You will need one that syncs real time inventory from your various sales channels and all your locations (warehouses and stores included) to provide a cross-channel view of the available stock levels.
You will need to route your orders to stores with available inventory, and the ability to fulfill the incoming orders. Make sure to track current orders in processing and the exact stock levels.
Offer your customers other shipping options as well
When you execute a ship from store strategy, it all happens as part of your back-end operations. Your customer does not know the shipping location of the product.
It would be a good idea to indicate to your online buyers that they can also collect the product from a store that is nearest to their location. Since you are already shipping from your store, you know of the available inventory there. For customers who want to, they can save on shipping. And you can save on order processing and fulfillment.
A buy online and pick up in-store option (BOPIS) will also assist your ship from store strategy. Customers can be guaranteed that the item is available at a physical location near them, and spend minimal time at the store. Just pop-in, pick-up, pop out.
Since you are tracking and syncing all your inventory levels, it becomes far easier to service every customer and fulfill every order that much more efficiently.
Ship from store is here to stay
There is no dip in sight for ecommerce, and the pandemic blitz has strengthened its future. Many stores still operating at sub-optimal capacity due to Covid 19 restrictions. This shift will allow stores to operate and assist in the sale of the products.
Ship from store is going to be a long term strategy, with many retailers already implementing it. This is probably one of the few ways for retailers to actually compete with ecommerce behemoths, and still stand to tell the story.
Even when the lockdown restrictions subside, the consumer market is more than likely to be still wary of shopping in physical stores. Any retailer who can deliver, literally and figuratively, will absolutely be in a better position when it comes to servicing consumer demand.
This is probably the best time to acquire new customers with an added sales channel. Potential consumers who you can impress now, will in all likelihood become your long-term repeat customers.
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Sharan is an avid writer with experience writing on different technologies for startups in various domains. He’s a self-professed tech nerd and start-up buff who likes keeping abreast with all the latest news in these areas.